The Australian Workers' Union v Alcoa World Alumina Australia
[2010] FWA 884
•10 FEBRUARY 2010
[2010] FWA 884 |
|
DECISION |
Fair Work Act 2009
s.437 - Application for a protected action ballot order
v
Alcoa World Alumina Australia
(B2010/2604)
DEPUTY PRESIDENT MCCARTHY | PERTH, 10 FEBRUARY 2010 |
Proposed protected action ballot by employees of employees of Alcoa World Alumina Australia employed in or in connection with Pinjarra Refinery site – requirement for contractor to pay employees supplementary shifts – permitted matters.
Background
[1] The Australian Workers Union (“the AWU”) have applied for a protected action ballot order (“PABO”) for employees of Alcoa World Alumina Australia (“Alcoa”) employed in or in connection with the Pinjarra Refinery site who are covered by the Alcoa World Alumina Australia Pinjarra Refinery Agreement 2005 (“the Pinjarra Agreement”). It is the third such application, two previous applications having been dealt with by Commissioner Williams and been dismissed.
[2] Alcoa asserts that the AWU is not genuinely trying to reach agreement because they are pursuing matters that are not permitted matters 1. The AWU does not contest that if matters they are pursuing are not permitted, then a PABO cannot issue but argues that the matters they are pursuing are permitted.
[3] Alcoa also raised concerns about the questions proposed to be asked in the ballot and claimed they appeared to be ambiguous. Alcoa did not seem to raise this issue as a reason they relied on that prevented the PABO being issued. I do not consider the questions proposed to be asked are reasons why the PABO could not issue. The questions posed are sufficiently clear and in my view employees would have no difficulty understanding what they were voting on. Whether or not any industrial action that occurred was protected action or not is a matter that could be considered at that time if it were asserted to not be protected action. 2
[4] Alcoa asserts that there are three clauses that are not claims about permitted matters.
[5] Clause 19.1 provides that:
“Where labour requirements exceed the capacity of existing manning levels working according to usual rosters, the Company has the right to utilise supplementary shifts or engage contactors to perform the work. If the Company chooses to engage a contractor the contracted employee(s) shall be paid at the relevant supplementary shift rate as prescribed by clauses 9 (c) (i) and (ii) of this agreement.”
[6] Clause 20.3 provides that:
“In the interest of maintaining and improving job security of employees covered by this agreement, if in any instance the Company engages contractors or labour hire, it will require the contractor or labour hire provider to engage its workers (whether those workers are employees or independent contractors) on terms and conditions at least as favourable as those applicable to in-house employees were they to perform that work. This means that a contractor will receive at least 100% of the pay, entitlements and conditions for which employees covered by this agreement who could perform the work would be entitled to. For the avoidance of doubt, if employees covered by this agreement would have been entitled to penalty rates had they performed that work (e.g. supplementary shifts), then the workers engaged by independent contract will be paid at least as favourably as those penalty rates.”
[7] Clause 25.3 provides that:
“Where an existing position becomes vacant, the Company will make every effort to fill the vacancy (whether by an employee or otherwise) within 4 weeks of the date of resignation or termination. Where a contractor/labour hire employee is used to fill the position the contractor employee will be paid at the supplementary shift rates as prescribed in clause 9 c (1) & (2) of this agreement.”
[8] Alcoa argues that each of these clauses restricts and qualifies Alcoa’s right to engage independent contractors and does so in a way which is unrelated and unnecessary for maintaining and improving job security.
[9] The AWU argues that the claims are permitted matters and further, that Clause 4 (d)(ii), the Aims of the agreement, make it clear that the acceptance of the use of contractors, providing they are engaged in accordance with clause 20 of the proposed agreement, make that clear. Clause 4 (d)(iii) states that:
“To this end the parties agree on the need to accept the use of contractors in accordance with clause 20 of this agreement.”
Consideration
[10] The AWU referred me to Automotive Food, Metals, Engineering, Printing and Kindred Industries Union v Bitzer (Australia) Pty Ltd trading as Buffalo Trident 3. That matter also concerned the issuance of a PABO and objections to an order issuing on the basis that the claim included a matter not pertaining to the employment relationship. There, the claims made included a provision that, “The employer must ensure the wages and conditions of contractors’ and labour hire companies’ employees engaged to do work covered by this Agreement are no less favourable than the wages and conditions provided for in this Agreement for equivalent or similar work.” In the Liquor, Hospitality and Miscellaneous Union, a matter seeking a PABO for employees of Coca-Cola Amatil Pty Ltd4, included a claim that, “If, after consultation, the Employer engages contractor(s), those contractors must be afforded the same terms and conditions of employment as they would receive if they were engaged as employees performing the same work.”
[11] In both those matters provisions sought were not found to offend the matters pertaining rule. Alcoa says in respect of both of those matters that the issues agitated here were not canvassed and further that the matters there concerned parity whereas the application here concerns penalty.
[12] Alcoa and the AWU referred me to Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) 5. It was found therethat the provisions being sought did not pertain to the relationship between the employer and employees. There the provisions sought included a prohibition on the use of contractors to reduce the number of employees employed by Wesfarmers Premier Coal Ltd, a requirement to consult with employees and the union if work required was over and above the capacity of the existing workforce, the minimum terms for contractors’ employees, an obligation on the employer to allow employees to inspect machines prior to any warranty work being carried out and various obligations to notify employees and the union prior to engaging a contractor.
[13] Justice French, as he then was, concluded that:
“In my opinion, cl 33 makes clear that the proposed agreement in this case was to include provisions restricting or qualifying the employer’s right to use independent contractors. Having regard to the basic test set out in Electrolux that a matter pertaining to the relationship between employer and employees will affect them in their capacities as such, I am of the opinion that cl 33 imports into the proposed agreement a discrete matter which does not pertain to that relationship. It is not merely ancillary, but substantive and distinct. Having regard to Cocks and the observations of Moore J in Mount Thorley Operations, I am of the opinion that on this ground the proposed agreement is not an agreement of the kind required by s 170LI.” 6
[14] In Transport Workers’ Union of Australia v Australian Air Express and Another (“the TWU case”) 7, a Full Bench of the Australian Industrial Relations Commission (“the AIRC”), in referring to Wesfarmers identified the task of the AIRC in relation to claims concerning the use of contractors in terms of drawing a line. It was stated there that:
“On one side of the line is a clause prohibiting or regulating the employers right to engage or use contractors and, on the other, a clause providing, that when engaged, certain minimum terms and conditions for their employees will be observed. Schefenacker acknowledges that the line is not always easy to draw. We are of the opinion that clause 10.5, in the context of the evidence in this matter, falls on the permissible side.”
[15] Other Full Benches of the AIRC have come to similar conclusions. 8
[16] I have approached this matter on two bases. Firstly, is the provision of the nature that it restricts or qualifies Alcoa’s right to use independent contractors? 9Secondly, does the provision regulate the manner in which independent contractors perform work?10
[17] The clauses that Alcoa complains of must also be seen in the context of other terms of the agreement and, in particular, how the operation of supplementary shifts works apply to existing Alcoa employees.
[18] The essence of how work is proposed to be arranged and organised for existing employees under the agreement sought is that employees are paid an annual salary and are placed on a shift roster. There are no hourly rates of pay that are easily quantifiable. There are no overtime provisions as such in the proposed agreement, but rather the equivalent of overtime work is available through employees working shifts that are classed as supplementary shifts because those shifts are in addition to their normal rostered shifts. If an employee works a supplementary shift, a flat rate is payable for the working of that shift. Whilst the supplementary shift payment is described as a “rate” it is clearly a flat payment for a shift worked. It would also seem that these arrangements have been in place for at least the current agreement and most likely well before then, although the origins and history were not canvassed.
[19] The manner in which work is organised, worked and paid is not the normal type of work arrangement of a weekly payment for ordinary hours within a spread of hours, with an hourly rate calculable and loading on that hourly rate for different types of shifts at different times and for overtime work.
[20] Here, for Alcoa to be able to have work performed by an independent contractor, the employees would have to be paid a full shift with a penalty component regardless of whether a full shift was worked and regardless of the regulation of how the work was performed and organised. It is these differences to the normal types of arrangements that I consider distinguishes these claims from those in the TWU case, the Schefenacker case and the NUW case.
[21] Alcoa says that such a cost would be prohibitive for them to then realistically to be able to engage contractors. The cost they say is not creating parity with its employees but rather is a prohibitive cost barrier to engaging contractors. I agree with them. In my view the provisions sought have the effect of restricting and qualifying the right of Alcoa to engage contractors. Nor should a contractor be required to arrange work in a manner similar or identical to Alcoa in order to perform that work. That is the effect of what the provisions would require.
[22] The provisions also have the effect of regulating the manner in which contractors perform work. It means a contractor may be able to arrange hours of work for that contractors’ employees to be ordinary hours but nevertheless be required to pay at an overtime rate for a minimum period of a full shift. To me, in practice that amounts to prohibiting or restricting other employers from arranging work patterns and hours in a way that is most efficient for them.
[23] I consider that each of the provisions sought fall on the wrong side of the line to be able to be classed as matters pertaining to the relationship between Alcoa and its employees. As a consequence I find that the AWU is pursuing claims that do not pertain to the relationship between Alcoa and its employees. The AWU cannot therefore be considered to be genuinely trying to reach agreement and a PABO cannot issue.
DEPUTY PRESIDENT
Appearances:
Mr M Cox of counsel, for the The Australian Workers’ Union
Mr A Power of counsel, for Alcoa World Alumina Australia
Hearing details:
2010.
Perth
28 January.
1 s.172
2 See John Holland Pty Ltd v AMWU & AWU [2010] FWAFB 526 at para 9
3 [2009] FWA 962, PR990463
4 [2009] FWA 920, PR990401
5 Wesfarmers Premier Coal Limited v Automotive Food Metals Engineering, Printing and Kindred Industries Union (No 2) [2004] FCA 1737 (23 December 2004)
6 See Wesfarmers
7 PR959284
8 See Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and others Re SchefenackerVision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 and others (“the Schefenacker case”) PR956575 and NUW and Excel and others(“the NUW case”) PR962259
9 see Wesfarmers para 104
10 see Construction, Forestry, Mining & Energy Union v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96, [1997] 1134 FCA per Moore J (30 October 1997).
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